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Wednesday, November 24, 2010

Port Authority’s Board Approves Service Cuts, Fare Increase

We found out that, sadly , the Port Authority ‘s board approved a 35% cut in service and a fare increases in order to cover a projected budget shortfall of $47.1 million due to loss of funding . Up to Fiscal Year 2011 the funds were granted by Act 44 of 2007 but after the Federal government rejecteda planned toll on I-80 this revenue source will be lost.

The Cause

However, before blaming the service cuts and fare increases on PAT, we shall consider all the facts.PAT projected operating revenues for the current fiscal year are $96.4 million or 26.6% of what is needed to cover the projected operating expenses. And this is a $5.2 million increase from 2007, yet in 2007 PAT was able to cover 27% of its operating expenses from its own revenues. Therefore PAT’s expenses have increased at a faster rate than its revenues. And this change occurred in spite of financial reforms such as freezing salaries, decreasing contribution on the employee’s healthcare, reducing personnel and improving operational costs. By comparing the budget for FY 2007 and the projected budget for FY 2010 we note that projected spending towards employee benefits was 13.9 % more than in 2007 in spite of the fact that PAT constantly decreased its contribution to employee healthcare since 2007.

This is why the Port Authority will not be able to make the shortfall in its budget and avoid service cuts or/and substantial fare increases. Because costs such as employment benefits, utilities or fuel depend on market prices it does not control.

So it is extremely important to request from our representatives to provide more funding solutions before we ask Port Authority to show accountability for its service level – and I do not say we should not demand better service or more transparency. Because we do need funding solutions and we need everybody to realize the impact the 35% cut in public transportation services will have on the region’s development.

The Impact

The Southwestern Pennsylvania Commission requested a travel demand model that considers the proposed cuts. This model estimates a 15% decrease in public transportation trips and a 0.3% increase in vehicle trips (19,300 more vehicles on the road).

A decrease in public transportation trips will lead to a decrease on operating revenue for the Port Authority which may lead to further service cuts.

An increase in the number of vehicles on the road, even by such a small percentage such as 0.3% will lead to more traffic congestions. Therefore it is estimated that the average rider will spend 14 more minutes in city traffic and about 10 more minutes when the suburbs are also considered during peak hours.These estimates may be lower if more car commuters will decide to use alternative such as carpooling or vanpooling. Or these estimates may be higher if it rains –we all know how traffic gets in Pittsburgh when it rains.

More vehicles on the road will also have a negative impact on the region’s air quality and its ability to attract more green businesses which have played an important role in its economic recovery until now.

The Conclusion

I read in the Pittsburgh City Paper today that Steve Bland said at the board meeting : "Today is a very, very dark day in Port Authority history". Andwe can add Today is a dark, dark day in the Region’s history .